ECON Documents

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ECON 3311: MONEY & BANKING
REVIEW
Financial Markets
Relationship between financial markets, savers, and investment
Debt instruments and their claim to future income
Equity instruments and their claim to future income
Be able to identify Treasury bills

Money and Banking HW 6
1. The largest component of aggregate demand is
Consumption
2. Purchases of new housing are part of
Investment
3. A rise in the real interest rate will cause consumer spending to
Decline
4. A rise in income will cause consumer spend

Money and Banking HW 7
1. If one country is hit with a shock that increases its income and demands more imports of
goods and services from other countries, thus increasing aggregate demand in those
countries, then the business cycle is being transmitted i

Money and Banking HW 4
1. When one party to a transaction knows more than another, the situation is one of
Asymmetric information
2. Adverse selection occurs when
people or firms that are worse-than-average risks are most likely to enter a contract that i

Money & Banking HW 1 (Chapters 2 & 3)
1. The periodic payments on equity securities are called
Dividends
2. Which of the following is NOT a benefit of financial intermediaries?
Their ability to take in large deposits and make small loans
3. In the United

Money and Banking HW 3 (Chapters 5 & 6)
1. Which of the following bonds has the greatest interest-rate risk?
A thirty-year bond
2. According to the Fisher hypothesis, if the real interest rate is 5 percent and the inflation rate rises from
2 percent to 4

Money and Banking HW 2 (Chapter 4)
1. Your favorite magazine, Fun with Present Value, offers you four different subscription deals for the next
four years. It has guaranteed its current and future subscription rates, as shown below. Which will you
take, i

ECON 3311 Money & Banking Chapter 1, 2, 3
1.
Aaron takes $100 out of his checking account and puts it in his savings account while Biff withdraws
$200 from his money market mutual fund in the form of cash. The total effect is that M1 _ and M2
_.
rises by

ECON 3311 Money & Banking Chapter 5 Chapter 6
1.
According to the expectations theory of the term
structure of interest rates, if the interest rate on
a one-year bond today is 3.0 percent, the
expected interest rate on a one-year bond one
year from now is

ECON 3311 Money & Banking Chapter 4 Key Terms
1.
amoritization
a process in which the principal amount of a security is repaid gradually over time
2.
compounding
earning interest on interest that was earned in prior years
3.
coupon bond
a security that pa

Economics 3311 Money & Banking Chapter 4
1.
According to the theory underlying the presentvalue formula, would you prefer to receive (a)
$75 one year from now, (b) $85 two years from
now, or (c) $90 three years from now, if the
relevant market interest ra

ECON 3311 Money & Banking Chapter 3 Key Terms
1.
commodity
money
money whose value is determined by its value as a material, such as the value of gold used in jewelry; also called
full-bodied money
2.
fiat money
money that has value mainly because the gov

ECON 3311 Money & Banking Chapter 5 Key Terms
1.
basis point
one-hundredth of a percentage point
2.
expectations theory
of the term structure
of interest rates
the theory that a long-term interest rate is equal to the average of current and expected futur

Corey Phelps
ECON 3311
Definitions:
Money- a current medium of exchange in the form of coins and banknotes; coins and banknotes
collectively.
Barter- exchange (goods or services) for other goods or services without using money.
Monetary aggregate- broad c

Corey Phelps
HW #3
Central Bank- a national bank that provides financial and banking services for its country's government
and commercial banking system, as well as implementing the government's monetary policy and issuing
currency.
Required Reserve Ratio

Corey Phelps
HW #4
monetary base- the portion of the commercial banks' reserves that are maintained in accounts with
their central bank plus the total currency circulating in the public (which includes the currency, also
known as vault cash, that is physi

Corey Phelps
HW #1
Definitions:
Financial Markets- a market in which people trade financial securities, commodities, and other
fungible items of value at low transaction costs and at prices that reflect supply and demand.
Direct Finance- a method of finan

what is my tolerance for ambiguity? Do I need to know what I will be doing tomorrow, or next month, or
do I look forward to the changes it will bring. Would I plan my trip to Canada day-by-day, or would I
prefer to just head north. Do I like a job that is

1. Making mistakes allows a person to learn where they went wrong, so when they try again, they
will know how to begin correcting the problem and why the problem exists. Making mistakes
creates a more intimate relationship between the person and the task

Corey Phelps
Because I said so
Extraversion- Daphne is displaying obvious signs of an extravert. She was assertive when she; insisted on
moving the couch 4 inches to the left, answering the phone even though Millie was opposed, and
vocalizing her negative

Two Kinds
In the short story
Two Kinds
, the author Amy Tan, anticipates on making the reader
reflect on the meaning behind the story. Tan does not communicate as one who analyzes with the
intent to clarify what the real issue is between her mother and h

The Federal Budget:
Taxes and Spending
Chapter 17
Introduction
The federal government spends over 20% of GDP.
Taxes collected are just under 18%.
That equals $3.5 trillion in spending in 2013.
In this chapter we will answer the following
questions:
Where

Growth, Capital Accumulation and the
Economics of Ideas:
Catching Up vs. Cutting Edge
Chapter 8
Growing on the Cutting Edge: The Economics
of Ideas
The United States, Japan, and Western Europe are on
the cutting edge of economic growth.
countries must c

Chapter 6 GDP
Difference between Macro and Micro economics
Micro
o Considers the behavior of individual people, firms and industries
o Study what people buy, jobs they take, how to distribute income between savings and
consumption
o Decision making of fi

Chapter 15 Notes
The Money Supply and the Federal Reserve System
Money has three functions
1. A means of payment, or medium of exchange
A barter economy is where people exchange goods or services for other goods and
services instead of exchanging money.